October 9, 2014 / 8:05 AM / 4 years ago

Lafarge about to seek EU approval for merger with Holcim

PARIS (Reuters) - Lafarge LAFP.PA and Holcim HOLN.VX are about to request approval from the European Commission for their planned merger, Lafarge Chief Executive Bruno Lafont told reporters on Thursday.

A logo is seen at a Lafarge concrete production plant in Pantin, outside Paris, April 7, 2014. REUTERS/Christian Hartmann

“We are indeed very close to (EU) notification,” Lafont said on the sidelines of a conference on affordable housing at Lafarge’s headquarters in Paris, adding that talks with Brussels had been “constructive” and that the companies were “well on track” to close the deal in the first half of next year.

Lafarge and Holcim unveiled plans in April to create the world’s biggest cement group with $44 billion in yearly sales.

But competition watchdogs in some 15 countries, as well as the European Commission, are expected to take a hard look at the deal, which brings together the world’s top two cement makers.

To appease regulators, Lafarge and Holcim have drawn up a list of assets they plan to sell worldwide that accounts for some 3.5 billion euros ($4.5 billion) of annual sales and 10,000 workers worldwide.

The pair have said they had received over 100 marks of interests for the assets but the formal bidding process has not yet started. The data room featuring detailed information on the assets to enable bidders to conduct due diligence has not yet opened but is “already well prepared,” Lafont said.

He would not comment on names of bidders nor would he say whether the pair would seek EU approval in the coming days or weeks.

A preliminary review by the European Commission takes 25 working days. The EU competition watchdog typically opens a phase 2 investigation of up to four months if it has serious concerns that a deal may harm consumers and rivals.

“I can only confirm that all is going well,” Lafont said. “There is serious appetite (for the assets) and a calendar that is going like clockwork.”

Several people familiar with the matter told Reuters this week that Irish cement maker CRH (CRH.I) had teamed up with Mexican rival Cemex (CMXCPO.MX) to explore a bid for all the assets Lafarge and Holcim plan to sell.

Germany’s HeidelbergCement (HEIG.DE) and Brazilian firm Votorantim Cimentos SA VCSI.UL are also considering a joint bid for the entire portfolio, the sources said.

These industry consortia would compete with several private equity groupings that have been formed to pursue a deal for the assets, which could be valued at anywhere between 4 billion and 7 billion euros ($5-8.85 billion), they said.

Editing by Andrew Callus

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